[UPDATE to May 5, 2011 release: Bullock Announces Settlement with Video Rental Stores, Montana Accounts Prohibited From Being Sent to Credit Bureaus]
Settlement requires Collection Agency to remove over 8,000 negative credit reports
HELENA – Over the next few days, 91 Montanans will receive checks in the mail, reimbursing them for payments they made to an Oklahoma-based debt collection company for late fees supposedly owed to Hollywood Video or Movie Gallery, Attorney General Steve Bullock announced Monday.
The majority of the checks range from $100 to $250, reflecting the amounts demanded by the collection company – National Credit Solutions (NCS) – to settle alleged late fees, plus $75 “collection fees” tacked on by NCS.
Bullock also sent letters to another 8,000 Montanans assuring them that, under the settlement with NCS, their credit reports no longer contain black marks related to NCS’s collection efforts for the now bankrupt video rental chains.
“These are important settlements whether people are getting their money back or having their credit reports restored,” Bullock said. “NCS has agreed to rescind every single negative credit report it issued related to the video rentals and this company is not allowed to come back and try to collect these debts in Montana in the future.”
Bullock also said that, even if the bankrupt companies try again to collect money, his office has received assurances that their efforts won’t affect consumers’ credit ratings.
In the letters accompanying the refund checks, Bullock assured former Montana customers of these video chains that, under no circumstances, should they ever have any negative activity on their credit reports related to these accounts.
If consumers experience problems relating to Movie Gallery or Hollywood Video accounts, Bullock said they should contact the Office of Consumer Protection at (800) 481-6896 or (406) 444-4500, or via email at firstname.lastname@example.org.
PROTECTIONS AND BENEFITS UNDER THE SETTLEMENTS
- Negative Credit Reports Have Been Removed. All negative credit reports have been removed. No Montana resident who was a former customer of these video rental chains should now have any negative activity on their credit reports related to Movie Gallery, Hollywood Video or National Credit Solutions.
- No Future Negative Credit Reports Allowed. No further negative credit reports relating to these businesses will ever be allowed. So, no Montana resident who was a customer of these video rental chains should ever have a negative report on their credit score related to Movie Gallery or Hollywood Video, or National Credit Solutions attempts to collect for them. This is true even if there are future efforts made to collect the debts allegedly owed to Movie Gallery or Hollywood Video. Further, any person or business that attempts to collect such debts is also prohibited from threatening or implying that a negative credit report could be issued if the debt is not paid.
- No Collection Fees. Initially, National Credit Solutions added a $75.00 collection fee to alleged debts. Under no circumstances is any additional fee allowed in Montana under the settlements.
- The Debt is Reduced to the Lesser of Alleged Late Fee or “Product Charge.” In many cases, the video chains’ accounts showed that consumers were charged both late fees and non-return fees for the same rental. In any future collection efforts, only the lesser of these two charges can be claimed.
- Debts Must Be Valid. Under the settlement, the lead representative involved in the bankruptcy is allowed to try to collect on accounts that it claims remain unpaid. If you receive a demand for payment, you have the right to get specific information and dispute it if you do not believe it is a valid debt. You should ask for:
- the title of the product
- the date it was rented
- the basis for the amount that is claimed
Bullock’s letters are in reference to NCS, the collection company working on behalf of the defunct video rental stores. More information on Bullock’s settlement with the bankruptcy trustee for those stores is online at /news/releases2011/20110505.asp.